Appellate Tribunal for Electricity provides regulatory certainty

Appellate Tribunal for Electricity provides regulatory certainty

APTEL holds that change in law claims can be considered at tariff adoption stage

The Appellate Tribunal for Electricity (APTEL) has held that change in law claims can now be considered at the tariff adoption stage. This will provide regulatory certainty and reduce the multiplicity of proceedings.

Represented by Vishrov Mukherjee (partner), Rohit Venkat (principal associate) and Juhi Senguttavan (junior associate) of J. Sagar Associates (JSA), the Green Infra Renewable Energy Limited (GIREL) had challenged the Order passed by the Rajasthan Electricity Regulatory Commission (referred to as the Commission).

The Commission had in August last refused to consider a change in laws that occurred (before tariff adoption) and after the contract was awarded to GIREL. It further directed GIREL to approach the Commission by way of a separate petition.

The Commission had observed that at the tariff adoption stage, it could only examine whether the competitive bidding process was in accordance with the guidelines issued by the Government of India. And also whether the process was held in a transparent manner.

The APTEL's Order is significant, as it has recognized that the respective State Electricity Regulatory Commissions would now consider the change in law events. This will avoid confusion, regulatory uncertainty and consequent difficulties in achieving financial closure.

The Order will help in addressing the change in law claims at an early stage. It will also help in the case of several projects that are at the tariff adoption stage and were impacted due to the proposed imposition of basic customs duty and an increase in taxes. This had resulted on account of the Supreme Court judgment in the Great Indian Bustard matter.